John Linton I wonder just how much things are now going to change in the provision of ADSL services now that the NBN fiasco is reaching a point where the two major telcos in Australia are much closer to determining what is likely to happen? As I said back in November 2007 - all the tender means is that 'current broadband' would go on hold while Telstra and Optus worked out what it would mean to each of them if the other one 'won' the right to build a new NBN.
That's pretty much what has happened; coincidentally giving Telstra a 9 month 'free kick' at signing up ADSL2 customers on their 900 ADSL2 exchanges at 'special offer' prices on 24 month contracts. Now Telstra has signalled it's about to start my predicted phase 2 of offering ADSL2 on their network (anyone remember all their statements about how they would never do that - listing the reasons why they wouldn't, back in 2007?). Their first sign up was the obvious one as PeopeTelecom had no ADSL2 service and also had a 'whole of service' contract with Telstra.
But who else will sign up to resell Telstra's ADSL2 and how will the other, smaller ADSL2 deployers, re-act as their potential (and in two cases actual) ADSL2 wholesale market is now threatened with either declining or never coming in to existence? There are no obvious medium, let alone largish, ISPs left to sign up with Telstra's service - particularly if they make a pre-condition of providing ADSL2 a Telstra only as a supplier condition - that would seem to eliminate all ISPs who have already rolled out ADSL2 which, pretty much by definition, eliminates all likely and sensible possible wholesale 'partners'.
This leaves the even more interesting scenario of how the larger ADSL2 networks (Optus, AAPT, iPrimus, iiNet, TPG) react to this, clearly signalled, move in terms of whether they increase their wholesale efforts or withdraw from them. Perhaps Telstra's actual strategy is to offer 'true cost' wholesale ADSL2 to the larger ISPs to ensure those ISPs don't continue to increase their number of ADSL2 exchanges and therefore 'control the damage' of competition in those exchanges.
In any event, it's obvious from Exetel's new and churn ADSL applications (which are unlikely to be any different to any other ISP's percentages) that ADSL2 is about to overtake, or has already overtaken ADSL1; and Exetel only has access to the 400 or so Optus exchanges. As ADSL2 is a lower monthly port cost than Telstra's 256 kbps port cost (to Extel as we get no discounts unlike other larger ISPs and 'whole of service' Telstra customers) it makes perfect sense that, given a choice, an end user would sign up for a much higher speed service at a much lower cost. How the latest Telstra 'change of heart' will affect the ADSL2 sign up rate is impossible for me to even guess at but it seems unlikely that it would slow the current very obvious trend of ADSL2 rapidly overtaking ADSL1 on the exchanges where it's available.
The likely competiveness of a wholesale Telstra ADSL2 offering will not be known until PeopleTelecom publish there first attempt at ADSL2 pricing (wait for the 'special' and 'early bird' marketing cr**). Based on PT's ADSL1 pricing over the past three years and their continuing failure to make a profit on a $A100 million annual turnover it is unlikely to be 'exciting' - despite their need to try and 'catch up' with all the other ISPs who have been offering ADSL2 for up to two years and Telstra's need to make their first ADSL2 wholesaler look successful.
To misquote WSC - "It isn't the end, or even the beginning of the end - but it might be the end of the begining" (of the Telstra re-domination of broadband 'wars').